Editorial: Public-run bus lines a bad idea

Opinion

A report from Britain that bus operator Stagecoach is planning to sell its New Zealand business prompts the Tramways Union to suggest that the Auckland Regional Council buy back the bus fleet. The left-leaning council is naturally open to the idea. This is the council that has happily paid a market ransom to return the Ports of Auckland to full public ownership. The re-acquisition of its old bus operation would make it easier for the council to integrate public transport by road and rail and, thanks to Stagecoach's purchase of Fullers, bring sea ferries under the council's wing for the first time.

The prospect of direct control of three modes of public transport may be too much for the council to resist even at a possible asking price of $252 million, though the cost to Auckland ratepayers would not, of course, end there. Stagecoach's services are already subsidised with $40.6 million annually, and still the Scottish multi-national finds its Auckland and Wellington operations insufficiently profitable to entice it to stay. Returned to public ownership, the bus operating costs would undoubtedly rise. It is not by chance that the buy-back suggestion came first from the Tramways Union. This year bus drivers began a strong push for better pay and conditions, winning a 14.8 per cent pay rise by disrupting services in May. Their case found public sympathy, and they stand to improve their position further if their employer is a body with the power to raise rates.

Meanwhile, bus patronage has been falling over the past two years after a decade of steady growth. The rising patronage occurred under Stagecoach's ownership, which should silence the usual critics of privatisation when public ownership is restored. If the present system, in which the ARC contracts services with private transport operators, is "dysfunctional", as council chairman Mike Lee puts it, the reason is that the council under-regulates standards and over-regulates the method of service. It has failed, for example, to require transferable fares and yet prescribes the form and patterns that Auckland's public transport will take.

Auckland is a sprawling, low-density city of diverse daily commuting needs. The ARC is trying to reconfigure public transport round fixed railway lines to the east, south and west and a dedicated busway to the north. The scheme has been criticised, most notably by a former standalone public funding agency, Infrastructure Auckland, for the likelihood that rail will cannibalise the few profitable bus routes rather than attract many more passengers to public transport. Stagecoach obviously agrees.

Last month it blamed the downturn in patronage on fewer foreign students coming here and competition from upgraded rail, which has recorded a 36 per cent increase in passengers as bus use dropped. This may be good news for the small number of commuters who live close to a railway station, but it is not good news for the region's ratepayers and national taxpayers, who together subsidise urban public transport. Even under the most optimistic predictions of patronage, the rail-based system is going to need a higher subsidy than the bus network because unprofitable train services are going to destroy the profitability of many of those main bus routes that have been able to run unsubsidised.

If the form and patterns of public transport were left to private enterprise, we would probably see it respond to demand with more varied vehicles, times and routes. But public bodies prefer to channel demand, if they can, into large, mass-transit lines. No wonder Stagecoach is said to be heading for an exit.